Invoice Finance - Invoice Discounting
Invoice Discounting is a way for businesses to release money from their unpaid invoices by selling the invoice to a factoring company at a discounted rate. The factoring company advances an agreed percentage of the invoice value within a matter of days and pays you the balance of the invoice once your customer pays, less interest and charges.
Under an invoice discounting agreement, your business carries out its own credit control function to ensure your invoices get paid on time. With this arrangement your customers are not aware that you use an invoice finance facility and they make payment against your invoices to a bank account held by the factoring company in your name.
Invoice Discounting might be the best solution for your business if you are a large business and having the credit control function done by the invoiice finance company would cost more than having it done by your own staff.
Invoice Discounting, like any other business finance product you have in place, should be reviewed regularly to ensure it still fulfulls the needs of your business.